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Avnel Gold reports new mineral estimate and PEA for Mali project

Avnel Gold reports new mineral estimate and PEA for Mali project

Photo by Bloomberg

24th March 2014

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – TSX-listed Avnel Gold Mining on Monday reported the results of a Canadian National Instrument 43-101-compliant mineral resource estimate and a preliminary economic assessment (PEA) for its Kalana gold deposit, located in south-west Mali.

Avnel’s shares jumped 50% after it announced that the resource estimate demonstrated a viable project with 1.25-million ounces of gold at a grade of 4.53 g/t in the indicated category and 250 000 oz at a grade of 3.76 g/t in the inferred category.

The project would cost $188-million to build and produce 138 000 oz/y of gold in the first four years of operations, followed by 98 000 oz/y for the next decade of mine life.

The after-tax and imputed-interest net present value, including a 10% discount, was estimated at $194-million, with a 53% internal rate of return.

The mine would produce gold at all-in costs, including capital cost and excluding taxes and imputed interest, of $679/oz.

The operation would use a conventional gravity and carbon-in-leach process plant, which could achieve 93% recovery for the pit and 83% for tailings, to recover a total of about 1.46-million ounces.

Both of the studies were based on a cutoff grade of 0.9 g/t and a gold price of $1 110/oz, and were undertaken by Snowden mining industry consultants.

“The robustness of the results of the mineral resource estimate and PEA indicate the potential for the development of a new mine at Kalana and Avnel intends to immediately commence a prefeasibility study and, assuming that to be positive, a feasibility study,” Avnel CEO Howard Miller said.

On Monday, the company’s shares traded 50% higher at C$0.07 apiece.

Edited by Creamer Media Reporter

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